TaxTMI 
TaxTMI 
2000 (4) TMI 63
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.... dated 1-3-1978 (as amended) granted exempted lower rates at 25% ad valorem subject to certain conditions. The concession was in respect of Air-Conditioners used in the establishments stipulated in the Schedule to the notification. Sl. No. 11 of the Schedule related to "Any hospital run by the Central Government, a State Government, a Local Authority or a Public Charitable Institution". The conditions of the notification are as under : - "(i) the Collector of Central Excise is satisfied that such air-conditioners are required for use in any of the establishments specified in the Schedule hereto annexed; (ii) the manufacturer furnishes to the Collector of Central Excise a written undertaking by the owner, or, as the case ma....
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.... not sufficient for denying the benefit of the notification. The learned Vice President also agreed with the Judicial Member that this is a case in which there has been substantive compliance by the appellants with the conditions of the notification and the delay in intimating the department is condonable and is not, in any case , such which may be fatal to their claim for benefit of Notification No. 56/78. However, in view of the decision of the Tribunal in the case of Jyoti Ltd. v. Collector of Customs, Baroda (Final Order No. 81/96-B, dated 26-2-1996) and the rulings of the Supreme Court in Thermax Pvt. Ltd. v. Collector of Customs reported in 1992 (61) E.L.T. 352, he felt that the issue may be referred to a Larger Bench. Therefore, the ....
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....upreme Court. He referred in particular to the decisions of the Supreme Court in the cases of Kedarnath Jute Manufacturing Co. reported in 1965 (3) SCR 626 (S.C.), Mangalore Chemicals & Fertilizers Ltd. reported in 1991 (55) E.L.T 437 (S.C.), Union of India v. Wood Paper Ltd. reported in 1990 (47) E.L.T. 500 (S.C.) and Novopan India Ltd. reported in 1994 (73) E.L.T 769 (S.C.). He also referred to several decisions of the Tribunal. 6. The learned CDR submitted that the rule relating to interpretation of exemption notifications emerging from the judgments of the Supreme Court is that exemption being in the nature of exceptions, it is to be construed strictly at the stage of determination whether assessee falls within its term or not and in....
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....n it being in nature of exception is to be construed strictly and against the subject but once ambiguity or doubt about applicability is lifted and the subject falls in the notification then full play should be given to it and it calls for a wider and liberal construction." 8. ­ In the Mangalore Chemicals & Fertilizers Ltd. case, while dealing with the question of satisfaction of conditions in the exemption notifications for availing of the benefits, the Supreme Court observed that "if the condition was a substantive one and one fundamental to the policy underlying the exemption, failure to satisfy the same would lead to denial of the exemption" and the Court ruled as under :- "Stringency and mandatory nature must be justified by ....
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....erent stages of interpreting it. In the instant case, there is no dispute raised that the policy of the exemption notification was to grant exemption to certain establishments. It is not in dispute that the appellants' hospital fulfilled the criterion. Thus, at the eligibility stage, according to the strict construction of the notification, the appellants are eligible for the benefit. There is also no dispute raised that the appellants fulfilled the condition of using the exempted goods in the hospital for the approved purposes. The dispute is only about the delay in intimation and inspection by Excise etc. These conditions cannot be treated as substantive and mandatory and based on considerations of Policy. As the Supreme Court pointed out....